Key Points to Consider While Taking Loan Against Property


Mortgaging your own property, especially the one which is bound to rise in the near future is a great way to meet your financial requirements. You get the funds without selling off your asset and also pay very low-interest rates compared to unsecured loans or traditional finances.

Borrowing finance on your owned property would be termed as a loana gainst property. And in India; there are leading banks and finance companies who offered loan against property on your residential as well as commercial property at substantially lower interest rates, flexible repayment options and lengthy tenure for repayments.

Here are some key points that you have to consider while taking a loan against property:

Interest Rate
Well, since it’s a loan product the interest rate would form the crux part and the low-interest rates is possibly an important selling point for Loan against property. The interest rates are generally low at around 9-11% with a nominal processing fee of 1-2 on the loan amount. With LAP you can meet a host of purpose such as starting a business, child's education, medical treatment, daughter or son's marriage, constructing a villa at native, etc.

Loan Amount
Usually, LAP varies between 65% to 70% of your property's market value. Most leading private finance companies and banks will finance loan value in crore as well. It is advisable to opt for LAP if your property value is a high and upper limit on other loan products are providing inadequate to meet your immediate funds.

Processing Fee
LAPs will also have a processing fee. While most banks charge up to 1% on the loan amount, NBFCs will take around 1-2% of the loan amount. Pre and post penalty, cheque delays charges are also to be kept in mind. So, it's better to compare these charges for selecting your best deal.

NO Tax benefits
While education loan, home loan fall under tax brackets and people can avail benefits each year, under LAPs you get any form of tax benefits

Evaluation factors
Some of the factors basis on which your loan amount is decided would be income source, existing debts, age, property age and its value - existing and future, credit score and additional income source. After thorough evaluation lenders will offer a particular loan amount and interest rates. Good credit score and higher property value will be the best factors to negotiate for low-interest rate deals

More processing time
Since your Loan against property will be sanctioned on the basis of your property, lenders will require time to verify the property and its related documents, technical aspects, inspection before approving the loan amount. Apart from this, the lender will verify your income source to know your repaying capacity.

A lap definitely gains an edge above all other option like a personal loan or traditional finance in terms of interest rate, loan amount, loan tenure, and flexible ways to repay the loan. With the help of online facilities, apply for LAP is just a click away! Right from comparison to sending the application, loan disbursal and paying your monthly installment everything can be done online. Don't let the financial hurdles to lack your dreams behind, apply for LAP online, now!

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